Nigerian Smartphone Boom Challenges Nokia Africa Dominance

Nokia remains the handset of choice in Nigeria’s mobile phone market with a market share of almost 80 percent, followed by Samsung with 3.7 percent, according to statistics by analytics firm StatCounter. Photographer: Trevor Snapp/Bloomberg

The 32-year-old engineer already owns three handsets, yet
said he is prepared to pay 100,000 naira ($632) to 150,000 naira
for a smartphone to add to his collection.

“I’m a phone freak,” said Olushola, clutching a
BlackBerry in his left hand while a black Nokia Oyj N73 peeps
out of his jeans pocket. “If you don’t have those smartphones
you look less trendy in society.”

Soon Olushola, whose second Nokia -- an N900 -- is charging
in his car, will be spoiled for choice as Microsoft Inc. and
China’s Lenovo Group Ltd. try to grab a slice of a market
already occupied by BlackBerry, Samsung Electronics Co. and
Tecno Telecom. Both will introduce devices to a country where
the number of smartphone users is expected to increase to more
than 35 million in 2017 from 5.6 million at the end of last
year, according to research by Informa Telecoms & Media.

Nigeria, Africa’s most populous country with more than 160
million people, is projected to grow its economy by 7.2 percent
this year, above the 5.6 percent average for sub-Saharan Africa,
according to the International Monetary Fund. Mobile phone
companies see it as a particularly attractive market because
many Nigerians own more than one device, allowing them to take
advantage of cheap tariff deals and overcome patchy network
coverage.

Data Subscriptions

MTN Group Ltd., the largest mobile phone operator in
Nigeria with 51.3 million subscribers at the end of March,
increased revenue from data services in the country by about 64
percent in the first quarter partly because of increased use of
smartphones, according to Brett Goschen, chief executive officer
of the company’s Nigerian unit.

“The biggest driver is the devices, particularly the
smartphones,” which appeal to those who need to access the
Internet at work, Goschen said in an interview in Lagos, the
commercial capital. “Once he can do that and use applications
on smartphones that really drives the data usage, that’s really
where the increase is coming from.”

MTN has 195 million subscribers across more than 20
countries including Nigeria. The company’s shares fell today
after Bloomberg News reported that it is exploring a potential
acquisition in India, according to four people familiar with
the matter. The stock declined 0.9 percent to 180.38 rand by
2:26 p.m. in Johannesburg, valuing the company at 340.65
billion rand.

Afrinolly App

Chike Maduegbuna was among the first to see the growth in
Nigeria’s smartphone market when his company FansConnectOnline
Ltd. created Afrinolly, an application that allows users to view
trailers and read news about the country’s film industry, known
as Nollywood.

Afrinolly has been downloaded more than 2.3 million times
since it was introduced last year, about 90 percent onto
smartphones, Maduegbuna said in an interview. The app is
preloaded on some MTN devices and Maduegbuna hopes to strike a
similar deal with Lenovo.

“The smartphone culture is growing across Nigeria and
other African nations,” Maduegbuna said. “People are becoming
conscious of what they can do with smartphones and they’re
getting cheaper.”

Microsoft, Lenovo

Both Lenovo, the world’s second-biggest maker of personal
computers, and Redmond, Washington-based Microsoft have
recognized that price is crucial to expanding in Africa,
particularly in Nigeria where 63 percent of the population in
2010 were considered poor, according to the World Bank.

Lenovo will introduce its handsets across as many as six
price bands and some could retail at about $500, Oliver Ebel,
vice president and general manager of Lenovo Middle East and
Africa, said in an interview in Johannesburg. Microsoft may
discuss with local telecommunication companies and the Nigerian
government about how to make smartphones more affordable,
according to Gustavo Fuchs, who runs Microsoft’s Windows Phone
business in Africa and Middle East.

“You see a lot of people that could afford a smartphone in
Nigeria with a feature phone,” Fuchs said in an interview in
Johannesburg, referring to cheaper, less sophisticated handsets.
More attractive pricing, coverage and data connections would
probably help boost smartphone usage, he said.

Nokia Dominates

Nokia remains the handset of choice in Nigeria’s mobile
phone market with a market share of about 73 percent over the
year through April, followed by Suwon, South Korea-based Samsung
with 4 percent, according to statistics by analytics firm
StatCounter. Smartphones account for about 10 percent of the
country’s handset market, according to Fuchs.

That’s good news for Sabastien Joseph’s business selling
Nokia handsets from the boot of his car at the edge of Abuja’s
Banex Plaza. The 23-year-old, who owns both a BlackBerry and
Nokia phone, makes as much as 50,000 naira a day.

“We do sell plenty very well,” he said. “People like
Samsung technology, but mainly because of the pinging technology
most people go for BlackBerry,” he said, referring to the
device’s messaging service.

One advantage for Nokia in Nigeria is its perceived
strength in battery life, making its phones attractive for
residents of a country where blackouts are a daily occurrence
and demand for electricity is nearly double the supply of about
4,000 megawatts.

Lenovo is trying to overcome this problem by introducing
smartphones with a longer battery life, possibly with the
capability to charge from other phones via a USB connection,
Lenovo’s Ebel said. Until that day arrives Agbaje Olushola must
continue to rely on one of his two Nokia phones because he
trusts their durability and battery life.

“In Nigeria we have electricity problems and you can
always rely on your Nokia phone for the battery,” Olushola
said. “You can charge it and maybe for the next three days it
will still be on, compared to the BlackBerry you have to charge
every 10 hours or thereabouts.”